Italy's financial markets regulator, Commissione Nazionale per le SocietÃ
e la Borsa (Consob), approved a new disclosure regime on short sales on 10 July, under which investors must report material downward positions on shares traded on the Italian regulated markets.
Net short positions on shares of companies listed in Italy must now be reported to Consob whenever they trigger certain thresholds. The first reporting obligation applies when the net short position becomes equal to or exceeds 0.2% of the issuer's share capital. A further obligation applies in connection with any variation equal to or exceeding 0.1% of the share capital.
This requirement aligns Italian law to the regimes already in force in several other European countries. Germany's regulator, Bundesanstalt für Finanzdienstleistungsaufsicht, and France's Autorité des Marchés Financier established short position disclosure regimes on 31 January and 1 February respectively.
The thresholds in Germany apply until 25 March 2012 to the stocks of ten financial firms, while in France they will apply to stocks listed on the main Euronext and small- to mid-cap Alternext markets.
Consob said that the measure, which applies from 11 July until 9 September 2011, strengthens its supervisory powers in the current volatile market environment.
In September 2010, the European Commission proposed regulation for short selling that includes private and public regulatory thresholds for the disclosure of short positions. The European Parliament and the Council of the European Union are still negotiating on the final version of this text.
The Parliament disagrees with Council on a number of points, including the ability of member states to opt out of a proposed ban on naked short-selling of sovereign credit default swaps.